Bybit CEO Ben Zhou Dispels Rumors of Insolvency, Reassuring Investors the Exchange Is Operating as Normal

This week, rumors online claimed that a crypto exchange was experiencing insolvency issues, worrying the community. Amid the uncertainty, users identified Bybit

Cryptocurrency exchange Bybit has refuted rumors circulating online that it is experiencing financial difficulties.

The rumors, which began circulating on private chat groups on Tuesday, sparked concerns among users about a potential collapse of the exchange, similar to the recent failure of FTX.

According to reports, the rumors were prompted by a sudden drop in Arkham Intelligence’s Proof-of-Reserves (PoR) graph for X, which showed a decrease from the $11 billion range to $6 billion.

However, an X user pointed out that the news was false and that Arkham’s graph was experiencing technical difficulties. The user explained that a specific wallet was causing a bug that prevented over $4 billion in funds from being displayed on the chart. When checked individually, all assets were present in the wallets.

While awaiting clarification, users engaged in light-hearted banter, using memes and references to the FTX collapse to ease the tension. One X user shared a "copypasta" post from 2022, poking fun at the rapid spread of rumors within the community.

"The prop desks in crypto are worse than teenage girls when it comes to gossip and I don’t want to be collateral damage in a self-fulfilling prophecy," part of the post reads.

Other users advised the community to thoroughly research news before spreading fear, uncertainty, and doubt (FUD), and suggested using alternative platforms to verify Bybit’s PoR and related information.

On May 23, Bybit CEO Ben Zhou addressed the concerns and stated that the crypto exchange had not been hacked, as some appeared to be suggesting, and that it was not insolvent.

"Some FUD spreading around X again, as usual," Zhou wrote in a May 23 tweet. "We are not hacked, not insolvent. Snapshot of our POR on May 8. Link to Nansen dashboard below."

The dashboard showed the exchange’s $11 billion assets. One of the charts revealed that the crypto exchange’s assets were worth over $10 billion this week, confirming that Bybit’s reserves did not drop.

At the time of writing, Arkham’s graph appears to be fixed. The platform’s PoR graph for Bybit now aligns with Nansen’s $11 billion graph.

Crypto regulators have recently increased their scrutiny of Bybit. Last week, French authorities flagged Bybit for operating without a license in the country.

The Autorité des Marchés Financiers (AMF) issued a reminder that the exchange has been blacklisted in France since 2022. The AMF also stated its authority to block the crypto platform’s website and advised users to protect their assets before they become inaccessible.

In March, the Hong Kong Securities and Futures Commission (SFC) also labeled Bybit a "suspicious" platform. As reported by Bitcoinist, the SFC’s warning was part of its efforts to crack down on unregistered platforms in Hong Kong.

The financial regulator listed 11 products offered by the crypto exchange as "suspicious" and noted that Bybit was an unlicensed platform. The SFC went on to caution users about the "risks" of investing in an unregulated platform.